Dahlia Company purchased equipment on April 1, 2017, for $105,000. It is estimated that the equipment will have a $5,000 residual value at the end of its 5-year useful life. The company prepares annual financial statements.

Instructions:

Compute the amount of depreciation expense recorded at year-end on December 31, 2017, using the straight-line method of depreciation. (2 points)

If the company uses the double-declining balance method of depreciation, what is the book value of the equipment at December 31, 2018? (2 points)

Assume the company uses straight-line depreciation and sells the equipment on December 31, 2021 for $12,000. Prepare the journal entry on December 31, 2021 to record the disposal. (3 points)

Assume the company uses straight-line depreciation and sells the equipment on June 30,

2020 for $36,000. Prepare the journal entry on June 30, 2020 to record the disposal. (3

points)

Bonus: (2 points)

Assuming the company uses straight-line depreciation, calculate the depreciable cost of the

equipment.